The Rise and Fall of Steel Magnate Charles M. Schwab

On February 18 in the year 1862, one of the world’s most famous magnates in the iron and steel industry was born in Pennsylvania, United States. His name was Charles Michael Schwab, the legendary co-founder of Bethlehem Steel, once the second largest steel company in the World.

Charles M. Schwab
Charles M. Schwab (Credit: wiki commons)

Charles Schwab was the son of a textile worker. He attended St. Francis College (now University) for two years and earned two certificates. He started his career as a driver at a Carnegie-owned steel plant in Braddock, a suburb of Pittsburgh City. Because of his exemplary work ethic, he was promoted to become general manager where he showed his talent people management especially in handling the union. He was named president of Carnegie Steel Company in 1897 at the age of 35.

In 1901, Charles Schwab was instrumental in the formation of US Steel Corporation, soon to become the world’s largest integrated iron and steel company for many years. He was made the company president but later fell from favor of the main financier, J. P. Morgan. After resigning from US Steel in 1903, he formed Bethlehem Steel Corporation in 1904 upon the purchased of the Bethlehem Steel Company which then became a subsidiary.

Under the leadership of Charles, Bethlehem Steel grew to become the second largest iron and steel company in the world. He fostered competition among the workers which increased their productivity. He concentrated in the manufacture of steel beams which enabled the company to capture the market for bridges and building construction. He purchased a large shipyard which became a ready customer for its other steel products. During World War I, the company prospered immensely as hundreds of naval vessels were ordered by the US Government.

During the Great Depression of the 1930s, demand for iron and steel plummeted. Bethlehem Steel, along with other steel companies, encountered financial difficulties.

Charles Schwab died of heart disease in 1939 at the age of 77. Before the Great Depression happened, he was estimated to have fortune worth $200 million. Due to his lavish lifestyle however, his wealth slowly dissipated and he died insolvent. Bethlehem Steel managed to recover after the war but it again underwent financial problems in the 1980s and 90s. It was finally sold to Wilbur Ross’s International Steel Group in 2003 after declaring bankruptcy in 2001.


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